10 Tips for Choosing a Brick-and-Mortar Business Location

Opening a brick-and-mortar business location is a big step for any company, large or small. Whether your location is your first or one of many, there are several considerations that can and should impact your choice of location.

At Addition Financial, we work with our small business members daily to help them fund their business growth, and that includes offering guidance about choosing a business location. Your choice of location may impact everything from your income to your business profits to your ability to obtain financing. With that in mind, we’ve created this overview of the process plus 10 tips for choosing a brick-and-mortar business location.

Why is Choosing a Location for a Business Important?

Choosing the right location for your small business is essential if you want your business to succeed. There are several factors that can play into your decision.

Zoning Codes

Zoning codes vary from city to city and play an essential role in determining whether a business location is right for you. For example, a zoning ordinance might say that a location is zoned for retail use but not for industrial purposes.

You should always check the zoning codes for any area where you might buy or rent property to make sure that it’s legal for you to do business there. If you skip this step, you could be fined or even have your location shut down.


Cost is another factor that makes choosing the right business location tricky. Renting a retail space in a busy downtown area is likely to cost more than renting or buying one in a suburban or rural area. You’ll need to get a handle on average costs for real estate in your area and determine what you can afford.


You might have the best products or services to offer but if people don’t know about your business, it’s likely to fail. You’ll need to consider whether the location you choose is one that will allow people to see and learn about your business. 

Community and Safety

The community of any proposed business location should be one where people are looking for products or services like yours and feel safe visiting. For example, there’s a reason that certain streets have clusters of retail shops. If you’re opening a retail store, you’ll get the best results if you choose a good location that people already frequent for shopping.

Should Competition Be a Factor in Choosing a Business Location?

Before you choose a business location, you should consider where your competitors are and how close you want to be to them. As we noted above, retail stores often exist in close proximity to one another, as is the case in downtown shopping areas or shopping malls. Being close to other shops can be useful but you’ll want to be careful about your proximity to your competitors.

For example, a bridal shop might do very well in a busy shopping district that included apparel and footwear shops, restaurants and beauty salons. In most cases, though, it would not be a good idea to set up shop next door or across the street from a competing bridal shop. 

The same is true with business services. A tax accountant might not want to buy or rent a space next door to a rival accountant unless they targeted different industries. 

The only exception to this rule might be if you intend to open a brick-and-mortar location in a big city where there are enough prospective customers to allow you to get your fair share of the pie. As a rule, you should try not to be too close to your competition.

What is a Location Strategy?

If you intend to open one or more brick-and-mortar locations for your business, you may want to consider creating a business location strategy to help you choose the best locations. A location strategy is a plan to help you determine the best locations for your offices, stores or employees.

You may not need a full location strategy if you’re opening your first location although it can help. Most businesses that develop a location strategy do so because they are rapidly expanding their business or consolidating it.

Here are some of the factors that go into developing a location strategy.


There are several ways in which labor factors into a location strategy. These include:

  • Talent supply. How many employees with the qualifications and experience you need are available?
  • Talent demand. Are other employers/competitors looking for employees with the same qualifications you need?
  • Salary expectations. How much money are qualified employees expecting to make–and can you afford to pay it?
  • Current and projected population growth. Is the area attracting new residents or are people moving away? 
  • Education. How many people each year are graduating with degrees that are a requirement to work for your company or in your industry? On a related note, are graduates with these degrees moving to the area?
  • Diversity. Diversity and inclusion are increasingly important to companies in every industry, so you’ll need to ask yourself if the area you’re considering has a diverse employment pool.

Quality of Life and Culture

In addition to labor, there are other important factors involving the culture in the area where you open a location as well as the quality of life there:

  • Commuting. Is the location in an area where employees will need to drive to work? You should also ask how close it is to residential areas where employees would have the option of walking or biking to work, as well as looking at the availability of public transportation.
  • Crime rate. Is the location you’re considering in an area that’s safe for employees? This element is particularly important if employees will be arriving at or leaving work late at night.
  • Recreation and entertainment. Are there things for employees to do in your location? For example, some employees may like to be in an area where there are plenty of outdoor activities available or where they have access to cultural activities such as museums and concerts.

If your company is expanding, then you may want to consider creating a location strategy before you begin looking for new brick-and-mortar locations.

commercial real estate vocabulary sheet

10 Tips for Choosing Brick-and-Mortar Locations

When you are ready to choose a brick-and-mortar location, here are some tips to help you research locations and select the one that’s best for your business:

  1. Set a budget. Whether you are planning to buy or rent, you’ll need a budget for your brick-and-mortar location. Be realistic about what you can afford. 
  2. Keep your brand in mind. When you select a business location, keep your brand and audience in mind. You wouldn’t open a high-end retail shop in an office park or put your accounting office in the middle of a group of pricy boutiques.
  3. Consider your competitors. As we noted above, you won’t want to open shop directly across from your biggest competitor. Make sure you understand where your competitors are.
  4. Consider your audience. You want people to be able to find and access your brick-and-mortar business location, so you should keep proximity and accessibility in mind.
  5. Don’t forget logistics. Depending on what type of business location you’re opening, you may need to consider the logistics of receiving deliveries from raw material suppliers or vendors.
  6. Get the square footage you need. One of the most common mistakes that business owners make when looking for a brick-and-mortar location is getting a business space that’s better suited for where they’ll be down the line instead of where they are. There’s no sense in paying extra money each month to rent space you’re not using. Look for what you need now and worry about needing more space when you actually need it.
  7. Check out the parking. You may need to find a spot with available parking for employees as well as for customers. If you’re in a busy area, parking options may be limited and you’ll need to check to make sure your customers can park and get to you easily.
  8. Keep an eye on visibility. Whether you’re seeking space in a city or in an outlying area, you should think about how likely it is that the people who are in your target audience will notice your business. For example, a retail store that’s tucked behind a strip mall won’t be visible from the road and may be overlooked by consumers.
  9. Confirm the zoning laws in the area. As we mentioned earlier, you will need to make sure that the zoning ordinances in any area you’re considering will allow you to set up business there.
  10. Check for availability of labor. If you’ll be hiring new employees for your new location, you’ll need to examine the availability of labor. In addition to determining whether there’s a pool of qualified workers, you should also think about what will make your retail location attractive to employees.

These tips will help you decide how much space you need and where it should be located, as well as helping you evaluate and compare prospective locations.

Business location site selection requires planning and research. You’ll need to think about everything from cost to logistics. The 10 tips we’ve listed here will help you navigate the process and find a location that’s perfectly suited to your business needs.

Are you searching for a brick-and-mortar business location? Addition Financial is here to help! Click here to read about our business loans and credit cards.

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